Cleveland transformed into a tech sector: PD 175 (photos)

CLEVELAND, Ohio -- When you slow down at a traffic light, think of Garrett Morgan, an African-American inventor who sold his newfangled traffic light, the yellow light was his idea, to General Electric Co. in the 1920's.

Morgan, along with numerous other inventors and entrepreneurs, made Cleveland a hotbed of innovation during the city's early decades. Now, the region's willingness to reinvent its economic landscape is helping it stay competitive globally during the digital revolution.

Shipping, autos and steel made the city an industrial powerhouse during the Industrial Age. But in the 1990s, Cleveland lost several Fortune 500 companies, and startups struggled to get off the ground floor, said Ray Leach, CEO of JumpStart. Between 1990 and 2002, Northeast Ohio was among the worst-performing areas for entrepreneurship in the United States, as ranked by Entrepreneur magazine.

The business community and nonprofits created JumpStart in 2004; the nonprofit organization's goal is to boost entrepreneurs, especially in the tech field, as a way to re-energize the regional economy, Leach said. This effort mirrored similar drives in cities around the world to prioritize small, high-growth companies, Leach said.

Companies that JumpStart has helped have raised more than $2.1 billion in additional risk capital and created more than 10,000 jobs, according to the organization's website. During JumpStart's first 10 years, more than 400 Northeast Ohio tech companies were funded by angel investors and venture capitalists.

The digital revolution created a wave of thriving technology companies such as Hyland Software in Westlake, and Rosetta. Any of these could have moved to the coasts, but chose to stay in Northeast Ohio, said Kevin Goodman, managing director and partner of BlueBridge Networks, a cloud computing company.

"It speaks to the history of our Cleveland-based companies. They are loyal to the community and stayed in the community," Goodman said.

The rise of tech-oriented academic programs and R&D centers at the region's universities has helped the region's economy, said attorney Jennifer Stapleton, the organizer of TechniCLE, an annual networking event for tech entrepreneurs.

Hyland Software is an example of a small company that found success without leaving Northeast Ohio. Ed McQuiston, senior vice president of sales and marketing at Hyland Software, was employee number 170 when he joined the firm in 2001. Now the company has 3,000 workers, as well as customers in more than 80 countries.

"There is an evolving tech space in Cleveland," McQuiston said.

The tech community counted Beachwood-based Toa Technologies' purchase by software giant Oracle in 2014 as a major win. Toa, founded in 2003, spent three years on the Weatherhead 100 list of the fastest-growing companies in Northeast Ohio, according to press reports.

In order to keep momentum strong, Northeast Ohio's small and mid-sized companies need to keep up with new technology, re-educate their workforce and build diverse workforces, Goodman said.

The coding boot camp We Can Code IT has heard the call; the company trains women and people of color for IT careers, said CEO Mel McGee.

We Can Code IT graduates find jobs at firms that aren't thought of as "tech companies," but use a lot of technology. McGee listed TMW Systems, KeyBank, CoverMyMeds and others in this category. "We Can Code IT students help fill these needs," she said.

Leaders in the tech sector want to see the region's strides continue into the future. McGee thinks we need more risk-takers, such as city investment in startups, and companies hiring junior software developers. "We need some audacity," she said.

"We see more and more tech companies realizing this is a place where you can stand up and compete," McQuiston said. "Cleveland has an unbelievable future in front of it."